Odisha Illegal Mining: SC Asks Firms to Pay 100 Percent Penalty

Observing that the "rule of law" needed to be established to prevent illegal mining activities in other parts of India, the court said the exercise relating to the mineral policy should be completed by December 31.

Representative Image. (Image: Reuters)

New Delhi: The Supreme Court on Wednesday said that mining companies in Odisha operating without environmental clearance will have to pay a 100 percent penalty to the state on the price of illegally extracted iron and manganese ores with effect from 2000-01.

A bench of justices M B Lokur and Deepak Gupta also directed setting up of an expert panel under the guidance of a retired apex court judge to identify the lapses over the years which enabled rampant illegal mining in the state and recommend measures to prevent its reccurence.

It expressed concern over the environmental degradation due to such activities and asked the Centre to take a fresh look at the National Mineral Policy, 2008 saying it is "almost a decade old", particularly with regard to conservation and mineral development.

Observing that the "rule of law" needed to be established to prevent illegal mining activities in other parts of India, the court said the exercise relating to the mineral policy should be completed by December 31.

"We make it clear that minerals extracted either without environmental clearance or without forest clearance or without both will attract the provisions of section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957 and that 100 percent of the price of the illegally or unlawfully mined mineral must be compensated by the mining lease holder," it said.

The amount be deposited by the companies on or before December 31, it said.

The bench, however, did not direct a CBI inquiry to ascertain persons involved in the illegal mining activities as sought by advocate Prashant Bhushan, who was appearing for NGO Common Cause, saying the immediate concern was to stop these unlawful activities.

"For the present, we do not propose to direct an investigation or inquiry by the CBI for the reason that what is of immediate concern is to learn lessons from the past so that rapacious mining operations are not repeated in any other parts of the country. This can be achieved through the identification of lapses and finding solutions to the problems that are being faced," it said.

"Undoubtedly, there have been very serious lapses that have enabled large-scale mining activities to be carried out without forest or environment clearance and eventually the persons responsible for this will need to be booked. But...

the violation of the laws and policy need to be prevented in other parts of the country," it said.

"The rule of law needs to be established. We are, therefore, of the view that it would be appropriate if an expert committee is set up under the guidance of a retired judge of this court to identify the lapses that have occurred over the years enabling rampant illegal or unlawful mining in Odisha and measures to prevent this from happening in other parts of the country," the top court said.

It also said any mining activity carried out after January 7, 1998 without a forest clearance amounted to illegal or unlawful mining in terms of the Act attracting 100 percent recovery of the price of the extracted mineral.

The bench, however, clarified that in the event of any overlap with regard to illegal or unlawful mining without clearance would attract only 100 percent compensation and not 200 percent.

The court observed that the petitions filed before it suggested "a mining scandal of enormous proportions and one involving megabucks".

"Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed environment and forests and perhaps caused untold misery to tribals in the area.

"However, to be fair to the lessees, they took steps to ameliorate the hardships of the tribals, but it appears to us that their contribution is perhaps not more than a drop in the ocean also too little, too late," it said.

The bench relied on the 2014 final report of the Central Empowered Committee (CEC) according to which the total number of leases granted for mining iron and manganese ore was 187 in these three districts out of which 102 lease holders did not have requisite environment clearance under the Environment (Protection) Act, 1986 or approval under the Forest (Conservation) Act, 1980.

The report also suggested that state has issued notices to the lessees for recovery of more than Rs 61,000 crore.

The apex court took into consideration that some of the mining lease holders offered to deposit and some had already deposited crores of rupees for carrying out welfare activities in these three districts.

"To ensure that the amounts are utilised for the benefit of tribals in the affected districts and for area development works, we would like the chief secretary of Odisha to file an affidavit stating the work done as well as providing the audited accounts of the receipt and expenditure of special purpose vehicle from its inception," it said.

The court's verdict came on a PIL, filed by NGO Common Cause, had sought immediate intervention in the matter, saying that the Justice M B Shah Commission has pointed out large- scale illegal mining in the state.

Citing the commission's report, the petition had sought directions to "stop forthwith" all illegal mining in Odisha and termination all leases of firms found involved, besides seeking a court-monitored probe by an special investigation team or the CBI.